- Step 1: Educate them Explain that many free-lunch seminar presenters claim that "nothing will be sold" at the actual presentation. But odds are anyone who goes will get a sales pitch at a later date -- sometimes using high-pressure tactics.
- TIP: Download "How to Spot a Free Lunch Scam," which lists the 5 most common persuasion tactics, at "createthegood.org":http://createthegood.org/.
- Step 2: Ask the right questions If the presenter tries to sell anything, tell your friend to ask these 3 questions: Are you licensed to sell this product? Who are you registered with? And, is this investment registered with the U.S. Securities and Exchange Commission?
- TIP: Most investments must be registered with the SEC. All investment professionals must be registered with the Financial Industry Regulatory Authority known as FINRA, the SEC, or their state securities regulator.
- Step 3: Check the answers Stress the importance of checking the seller's answers, and offer to help do it. Look for proof of registration of the seller and the product. "SaveAndInvest.org":http://www.saveandinvest.org/ can walk you both through the vetting process. Or call (888) 295-7422.
- Step 4: Report suspicious information Urge them to report any irregularities to the proper authorities -- FINRA, the SEC, or their state securities or insurance regulator. "SaveAndInvest.org":http://www.saveandinvest.org/ can help you determine where to report your suspicions.
- Step 5: It’s OK to walk away If the professional is not registered and the product is not registered, tell your friend to walk away.
- Step 6: Become a monitor Become a Free Lunch Monitor -- someone who audits free-lunch financial seminars and workshops and reports any suspicious activities. You or your friend can download the Free Lunch Monitor tool kit at "createthegood.org":http://createthegood.org/, and use the checklist found in the how-to guide to rate investment presentations and submit your ratings to AARP.
- FACT: In a national survey by FINRA, 3 times as many known victims of investment fraud went to a free investment seminar as the general population.
You Will Need
- Healthy skepticism
- &amp;quot;How to Spot a Free Lunch Scam&amp;quot;